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African Competition Authorities Respond to COVID-19 Crisis

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FCCPC

By Lerisha Naidu and Thato Mkhize

The substantial increase in confirmed COVID-19 cases in Africa has led to innumerable complaints of anti-competitive conduct from customers and consumers across the continent, who have expressed concerns over sudden price hikes of healthcare and hygiene products as well as identified essential products. This has prompted rapid responses from African competition authorities.

In South Africa, competition and consumer protection authorities are collaborating in efforts to examining complaints from customers and consumers implicating companies for excessive and/or exploitative pricing of essential products.

Such essential products include facemasks, toilet paper and hand sanitisers. In addition, South Africa’s Department of Trade, Industry and Competition has introduced new regulations, which together with existing competition regulations on excessive pricing, deal with pricing and supply matters during the national disaster.

These regulations do not prevent market players from implementing necessary price adjustments, their objective being to prevent unjustified price hikes and facilitate the collaboration of essential service providers in a regulated manner.

Further, essential service providers – the private healthcare sector, hotel industry, banking sector and retail property sector – have been granted block exemptions from certain provisions of the South African Competition Act, thereby enabling them to coordinate resources and infrastructure for the benefit of consumers during the period of the national disaster.

The country has also entered a 21-day lockdown period, which began on Thursday, 26 March 2020 and is due to end on 16 April 2020. During this period, all non-essential services providers are required to allow employees to operate from their homes in order to limit non-essential human interaction.

The lockdown has affected the operations of both the Competition Commission (Commission) and Competition Tribunal (Tribunal), requiring that both refocus their resources on complaints filed in relation to COVID-19 and other urgent matters over the 21 days.

The scaling down of operations by the competition authorities has proved to be necessary, not only to comply with the resolution of the National Coronavirus Command Council, but also to deal with the increase in COVID-19 complaints submitted to the Commission – 559 complaints have been received to-date.

In Namibia, the Namibian Competition Commission (NaCC) concluded a market analysis, which revealed that the price of immune boosters, hand sanitisers and 3ply facemasks have substantially increased due to growing demand for these essential products.

In response to this, the NaCC formed a dedicated task team under its Enforcement, Exemptions & Cartels Division, which will continue to investigate and prioritise price exploitation complaints in relation to essential healthcare and hygiene during the COVID-19 crisis.

The NaCC is cognisant of the fact that it is necessary for certain essential service providers to collaborate during this period; therefore, we can expect engagements between the NaCC and the Namibian government, with the aim of introducing block exemptions similar to those introduced in South Africa.

Mauritius has also experienced a surge in the pricing of essential goods in response to the COVID-19 pandemic.

In addition, certain suppliers of essential goods in Mauritius have come under the spotlight of the authority, suspected of creating artificial shortages of supplies.

In response, the Mauritian government has announced that its Competition Commission will be tasked with monitoring the market for unjustified price escalations of essential goods and will prosecute any businesses found to be engaging in such restricted trade practices during this period.

The rest of Southern Africa’s competition authorities are yet to issue cautionary measures or publish competition regulations in response of the effects of the COVID-19 pandemic on their markets.

Although the number of confirmed COVID-19 cases in the East African countries combined are significantly less than those reported in South Africa, competition authorities in Kenya, Tanzania, Malawi and Zambia have adopted a proactive approach to guarding against unjustified price hikes and the excessive pricing of essential goods during this period.

The Competition Authority of Kenya (CAK) has published a cautionary note warning manufacturers and retailers that are implicated in price fixing or any sort of price manipulation behaviour that they will be subject to an administrative penalty of up to 10% of turnover.

Further, the CAK has ordered the removal of exclusivity clauses in agreements between manufactures and distributors of maize flour, wheat flour, edible oils, rice, sanitizers and toilet papers, effective 26 March 2020.

Exclusive distribution agreements between market players interfere with the allocation of favourable prices in relation to essential goods. The CAK highlighted that negative effects of such agreements may be further exacerbated during pandemics such as COVID-19.

In addition, distributors who also operate in the downstream retail market have been requested to provide these essential goods to other retailers on non-discriminatory terms.

The Competition and Fair Trading Commission (CFTC) of Malawi concluded an investigation on 23 March 2020, which revealed that 11 pharmacies in Lilongwe and Blantyre were excessively pricing hand sanitisers, facemasks and gloves in response to the COVID-19 outbreak in Malawi. The CFTC has also published a cautionary note warning against excessive pricing during this period.

The Competition and Consumer Protection Commission of Zambia’s cautionary note was directed at companies and individuals that are excessively pricing hygiene products in response to the demand during the COVID-19 crisis.

The Fair Competition Commission in Tanzania has responded to the Ministry of Industry and Trade’s request to monitor and report on whether market players are maintaining reasonable prices on essential items such as sterilisers, masks and disinfectant hand wash during the COVID-19 pandemic.

From a West African perspective, Nigeria announced a 14-day lockdown of its two major cities, Lagos and Abuja, effective Monday, 30 March 2020 at 11pm.

Accordingly, the Federal Competition and Consumer Protection Commission (FCCPC) announced that it will be scaling down on its operations and available resources will be redirected to focus on COVID-19-related complaints and issues.

The FCCPC similarly published a cautionary notice to suppliers, retailers and online shopping platforms, warning them against irregularly increasing prices of essential hygiene products in response to increased demand caused by the COVID-19 epidemic.

The FCCPC has been active in the enforcement of competition laws amid the COVID-19 crisis. Currently, it has referred four supermarkets and their pharmacy distributors to court for conspiring to hike prices and selling essential products at unfair prices during the pandemic.

Apart from communication indicating the scaling down of operations by competition agencies in Morocco, Tunisia and Egypt, no other preventative measures in response to COVID-19 have been communicated by competition authorities in North Africa.

Numerous competition authorities in Africa are aware of the effects of unjustified price hikes and excessive pricing on already vulnerable economies.

They have responded by establishing specialised investigation teams, refocusing existing resources to COVID-19 specific complaints and introducing new competition regulations – as is the case in South Africa.

African competition authorities have further noted that collaboration between themselves and consumer protection authorities, as well as between competing essential service providers, is essential in order to enable countries to adequately respond to the COVID-19 crisis. Unprecedented times appear to have called for unprecedented measures for competition authorities across Africa.

Lerisha Naidu is a Partner at Sphesihle Nxumalo and Associate at Baker McKenzie Johannesburg, while Thato Mkhize is a Candidate Attorney, Competition and Antitrust Practice at Baker McKenzie Johannesburg

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Ikeja Electric Signs Deal for Better Power Supply to Ayobo

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Ayobo Community Ikeja Electric

By Adedapo Adesanya

A tripartite interconnected mini-grid agreement has been signed by Ikeja Electric Plc, Enaro Energy Limited and the Ayobo community for the provision of reliable and uninterrupted electricity supply to Ishokan Phase 1 Estate, Mercy Land Estate, and Mercy Land Phase1 residents in Ayobo, Lagos State.

The initiative is in line with the Nigerian Electricity Regulation Commission’s (NERC) goal of ensuring there is a reliable and steady power supply across communities in the country through partnerships between distribution companies (DisCos) and independent power generators.

The agreement, which was signed on Wednesday at Ikeja Electric’s corporate headquarters in Alausa, Lagos, will rely on the interconnected mini-grid initiative of the power sector to provide the customers with an uninterrupted power supply.

Speaking on this, Mrs Seqinah Adewunmi, the Chief Finance Officer of Ikeja Electric, who represented the Chief Executive Officer, Mrs Folake Soetan, during the signing of the agreements, stated that the initiative was a landmark in the history of the power sector in the state.

She added that those communities will be the first to experience uninterrupted power supply via a blend of grid and off-grid generation and distribution of power.

According to her, “it will demonstrate the possibility that our customers can enjoy 24 hours power supply which is in line with the core mission of Ikeja Electric to be the provider of choice wherever power is consumed.”

She congratulated everyone that has been part of the process, revealing that the initiative will transform the ways in which electricity is being distributed in Nigeria.

She further stated that this initiative will set the pace for bigger things to happen as the plan is to expand to other communities within the Ikeja Electric Franchise area.

On his part, Mr Oluwaseun Smith, the Managing Director of Enaro Energy, expressed his appreciation that the project was finally coming to fruition, adding that the journey began about two and half years ago and was glad that all the efforts towards ensuring the signing of the contract were worth it.

He stated that Enaro Energy was committed to providing the necessary resources to ensure the success of the project.

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Obasanjo Charges Africa to Decide Its Energy Future

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Olusegun Obasanjo Africa

By Adedapo Adesanya

Former president of Nigeria, Mr Olusegun Obasanjo, has said Africa must take charge of its own energy destiny and use its rich resource assets for the benefit of its own people.

His comments come in support of the Africa Oil Week (AOW), which is necessitated as the world scrambles to find new sources of oil and gas to meet its energy needs following Russia’s invasion of Ukraine.

In this context, Mr Obasanjo noted that African countries cannot be beholden to the unrealistic ideals of the Global North for an exclusively renewables-driven economy, saying this is particularly true when the developed world is itself accepting the need for hydrocarbons.

“Like the rest of the world, Africa must follow energy policies that promote socio-economic development and sustainable hydrocarbon use,” he said.

The former Head of State, who ruled Africa’s largest crude oil producer from 1999 to 2007 said, “Africa is the lowest producer of greenhouse-gas emissions and needs to lift nearly half-a-billion citizens out of poverty.

“Responsible management of our hydrocarbons and investment in our economies is necessary to ensure a just energy transition and sustainable growth for our people.”

The European Union (EU) had previously said it intends to cut Russian-supplied oil by up to 90 per cent by the end of 2022, and the announcement has already caused global energy costs to soar.

Africa is one of the potential new sources of energy to replace this supply, with an estimated 61 billion barrels of oil equivalent being discovered in the region over the past 10 years.

Mr Obasanjo’s view aligns with that of the African Petroleum Producers Organization (APPO), which also called on member countries and other global institutions to use petroleum as a catalyst for energy security, sustainable development, and economic diversification in Africa through collaboration and partnerships.

Mr Obasanjo has been a major leader of Africa’s post-colonial period, having overseen Nigeria’s transition to representative democracy. Since his move out of the government sphere, he has been a senior statesman, active in defining geopolitical issues – including energy.

He also helped to shape the modern Nigerian oil industry, inaugurating policy reforms that have seen the country become an energy superpower on the African continent.

“Creating an African oil industry that benefits Africa’s people needs strong policy and regulation.

“During my time in government, we launched oil-and-gas policy reforms that helped to build a modern oil and gas hub. There were many learnings that we can apply across the wider region. I look forward to discussing these opportunities for Africa.”

He then called for accelerated dialogue on the sustainable development of hydrocarbons, and the role of Africa as a supplier of global energy needs.

“There has been much talk at forums such as the World Economic Forum (WEF) in Davos about a just energy transition. However, we must not allow Africa to be dictated to. The discussions at AOW will be pivotal in charting a new energy course for Africa. We will decide what is best for us,” he said.

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Akande-Sadipe Mourns as Another Oyo APC Chieftain Dies

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Muili Ojuolape Oyo APC chieftain

By Modupe Gbadeyanka

A member of the House of Representatives, Mrs Tolulope Akande-Sadipe, has expressed sorrow over the death of a chieftain of the All Progressives Congress (APC) in Oyo State, Mr Muili Ojuolape.

In a statement on Thursday, the lawmaker from the Oluyole Federal Constituency in Ibadan, the Oyo State capital, described the Oyo APC chieftain as a father who would be missed.

Mrs Akande-Sadipe, in the statement signed by her media aide, Mr Olamilekan Olusada, prayed to God to comfort the family of Mr Ojuolape and grant them the fortitude to bear the loss.

She expressed shock over the death of the party chieftain, saying, “The unthinkable happened. We received the news of the second loss in Oluyole APC. We are saddened by the exit of another committed progressive. It’s difficult to bear the pain!”

“Baba Ojuolape, as I fondly called you, Baba Muili Ojuolape, you were indeed a father to me in Oluyole. As you go to your maker, I pray you to rest in perfect peace. I will surely miss you, APC Oluyole will surely miss you, and APC ward one shall surely miss you too. TASK Oluyole shall surely miss you. My sincere condolences to your immediate family. May the Almighty uphold your family to bear this loss,” she added.

Mrs Akande-Sadipe stated further that, “It is natural to grief when death strikes in a well-knitted family, but we have the confidence that the sacrifices you made in your life to build the APC in your local chapter, Oluyole into a viable democratic institution, shall not be in vain.

“You have played your part and left, and your democratic credentials should always spur us to greater service.”

It was gathered that Mr Ojuolape, a prominent member of the APC in the Oluyole local government area of Oyo State, died on Tuesday after a brief illness in Ibadan.

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